MEDIATION CONFIDENTIALITY — BACKGROUND AND LATESTS DEVELOPMENTS

Since the mid-1980s California law has protected mediation communications from disclosure in order to promote the sort of candor and openness that is essential to effective mediations.

But a 2011 decision of the California Supreme Court barring the admission of evidence of mediation communications in a case in which a client alleged that a lawyer committed malpractice during the mediation[1] has resulted in an effort to revise the California Evidence Code to allow mediation communications to be offered into evidence in order to permit lawyers to be disciplined (and held financially accountable) for misconduct during mediation proceedings).

At the direction the California Legislature, the California Law Revision Commission (“CLRC”) is now conducting a study (Study K-402), which is focused on “The Relationship Between Mediation Confidentiality and Attorney Malpractice and Other Misconduct”. Since work began in 2012, the Commission’s staff has prepared a collection of comprehensive memoranda surveying the law, practice, statues, cases, and commentary on the subject. The Commission has also received substantial input from mediation participants (including parties, lawyers, and mediators) addressing whether mediation confidentiality should be compromised in order to permit lawyers to be sued and disciplined for mediation-related misconduct.[2]

The Law Revision Commission’s Initial Decision to Allow the Disclosure of Mediation Communications Relevant to Alleged Lawyer Malpractice.

In recent meetings, the Law Revision Commission has adopted tentative proposals to recommend that the Legislature amend California’s Evidence Code to allow parties to discover and offer into evidence all mediation communications that are relevant to proving or disproving claims that attorneys committed malpractice (as an advocate for a mediating party) in connection with a mediation.

To date, the CLRC’s tentative decisions include:

Creation of an exception to mediation confidentiality for all evidence proving or disproving professional misconduct or malpractice by an attorney advocate where the misconduct occurs “in the context of a mediation”.

This exception would not apply in a case alleging malpractice by the mediator, even where the mediator is an attorney.

The exception would apply in State Bar disciplinary proceedings as well as in malpractice suits.

The exception would not permit disclosure of mediation communications as part of an effort to unwind a mediated settlement agreement.

The exception would not affect existing protections against mediator being compelled to testify. Nor would it affect any current mediator immunity against suit.

A plaintiff bringing a malpractice case involving a mediation would be required to give notice to known participants in the underlying mediation.

In its most recent meetings, the CLRC has also rejected a number of proposals that would have imposed preliminary procedural requirements before mediation communications could be revealed. In particular:

The Commission rejected any requirement that cases which would reveal confidential mediation communications be subject to a preliminary judicial or private screening to bar the filing of cases that lack substantial merit.

The Commission also rejected proposals to require a judge to determine, before confidential information would be subject to discovery or disclosure, that the information is relevant to the malpractice claim and that the need for the evidence outweighed the privacy interests of people who would be adversely affected by disclosure. (This process is used in certain types of proceedings under Uniform Mediation Act, which has been adopted by a number of states and has more limited confidentiality protections than are available under California law.)

The Commission’s proposed exception to mediation confidentiality would not, however, limit the power of the Court to protect rights of privacy established in California’s Constitution.

The Commission’s Formal Draft Recommendation and Request for Public Comment.

During the course of the Commission’s study, SCMA twice submitted written views on this subject. In 2012, SCMA publicly opposed proposed legislation that would have eroded mediation confidentiality. More recently, SCMA submitted a carefully crafted statement to the Law Revision Commission opposing the effort to lift, dilute, or compromise mediation confidentiality to allow the disclosure of confidences revealed in mediations if a lawyer is being sued or disciplined for the alleged breach of a professional duty to his or her client.[4]

SCMA stated that candor and openness in mediation is just too important to be sacrificed because of what the Association’s experience demonstrates are only “rare, isolated, or unusual” claims of lawyer misconduct in mediation. But recognizing that the Law Revision Commission has decided (at least tentatively) to recommend that the Legislature allow judges and juries to be given access to confidential mediation communications where they are relevant to claims of lawyer misconduct, SCMA urged the Law Revision Commission to recommend meaningful procedural protections against unnecessary public disclosure of private information and confidences revealed in the mediation process.

In a second submission, SCMA’s President, then Floyd Siegal, reminded the Commission that:

“To the extent that courts in California have allowed judicial scrutiny of events that occurred during mediation, they have done so only in very limited circumstances and applying special procedural safeguards . . . thereby maintaining the confidentiality of the mediation process. In the event the Commission decides to recommend an exception for confidentiality in cases alleging attorney malpractice, similar protections to those mandated in Rinaker [ v. Superior Court (1998)] should be a part of the law.”

SCMA’s positions are not universally recognized, either within the mediation community or within the larger community of mediation participants. And SCMA’s recommendations have, so far, found little support in the CLRC.

LATEST DEVELOPMENTS.

The CLRC has now received additional public comment on its tentative recommendation to strip mediation communications of the confidentiality protection they now enjoy if the communications become “relevant” to a malpractice case in which a client sues his or her lawyer for misconduct during a mediation. A September 27, 2017 Staff Memorandum (Memorandum 2017-52) begins by characterizing the the public comment on the Commission’s legislative proposal as “decidedly negative” and “unfavorable”. Memorandum 2017-52, p. 1. It goes on to state that “the degree of opposition to the Commission’s proposal suggests that careful reexamination of the competing considerations is in order.” Emphasis original. Staff Memorandum 2017-52, p. 12.

A fuller discussion of the Staff assessment of the public reaction to the CLRC tentative recommendation can be found here.

What SCMA Members and Others Can Do to Have Their Views Considered By The Law Revision Commission.

As this process proceeds, SCMA members – and others interested in the subject – may submit their personal views on both the importance of mediation confidentiality and the need for protections against unnecessary disclosure of confidential information revealed in mediations directly to the Law Revision Commission. These comments may be directed to Barbara Gaal, Chief Deputy Counsel, California Law Revision Commission, either by mail, to 4000 Middlefield Road, Room D-2, Palo Alto, CA 94303; by fax, to 650-494-1335; or via email, to bgaal@clrc.ca.gov. Comments are due by September 1, 2017.

SCMA has collected additional materials from the Mediation Confidentiality debate to give members of the mediation community interested in this subject an opportunity to explore further. These resources include:

Selected Memoranda From The Law Revision Commission’s Comprehensive Background Materials On Mediation Confidentiality (Including Current Statutes),

Selected Materials Supporting The Creation Of New Exceptions To Mediation Confidentiality,

Materials Supporting Preservation Of The Current Rules Protecting Mediation Confidentiality,

Latest Posts & News Concerning Mediation Confidentiality

In a hearing on December 1, 2017 lasting one hour beyond the scheduled end time, the California Law Revision Commission (“CLRC”) gave its final approval to the Tentative Recommendation issued in June 2017 to create certain exceptions to mediation confidentiality. Its final approval is subject to the chair and /or vice chair approving further language […]

Individuals commit the sunk cost fallacy when they continue a behavior or endeavor as a result of previously invested resources (time, money or effort). Arkes & Blumer, 1985. Thus the CLRC has decided to press forward with its proposal to eliminate mediation confidentiality in legal malpractice cases despite opposition it’s staff characterized as “overwhelming.”

The CLRC Staff states that “The opposition to the Commission’s tentative recommendation can only be described as overwhelming.” The Staff goes on to suggest that “It might not even be possible to find a legislator willing to author a bill to implement the proposal.”

The California Law Revision Commission’s proposed legislation — which would strip mediation communications of their confidentiality where they are relevant to a claim of legal malpractice arising out of a mediation — has been available for comment since June of this year. And it has drawn a great deal of comment, both pro and con. Much […]

On June 22, 2017, the California Law Revision Commission issued its Tentative Recommendation following its study to create an exception to mediation confidentiality (Study K-402). All public comments are due by September 1, 2017. The Tentative Recommendation would be set forth in a new California Evidence Code Section 1120.5 that would allow the discovery and admission […]

Jack Goetz and Barbara Brown will update the membership on the work of SCMA’s Ad Hoc Committee on Voluntary Mediator Certification.

Lee Blackman and Phyllis Pollack will update the membership on the most recent meetings of the California Law Revision Commission concerning possible revisions to the Evidence Code with respect to mediation confidentiality.

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